Trump Demands Fed Rate Cut, Clashing With Powell’s Inflation Warning
Federal Reserve Chair Jerome Powell signaled patience on rate cuts amid rising uncertainty, while U.S. President Donald Trump framed the current moment as an opportunity to lower borrowing costs and sustain economic momentum.
U.S. President Donald Trump wasted no time in responding to Federal Reserve Chair Jerome Powell’s warnings about the economic risks of higher inflation and slower growth due to new U.S. tariffs.
In a post on Truth Social following Powell’s speech, Trump called on the Fed to cut interest rates immediately, criticizing Powell for acting “late” and urging him to move quickly.
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“Energy prices are down, interest rates are down, inflation is down, even eggs are down 69%, and jobs are up, all within two months – a big win for America. Cut interest rates, Jerome, and stop playing politics," he wrote.
The remarks underscore a growing political and economic divide over the Fed’s next move, as Powell signaled patience on rate cuts amid rising uncertainty, while Trump framed the current moment as an opportunity to lower borrowing costs and sustain economic momentum.
Interestingly, Trump was the one who nominated Powell for the post in 2017, during his first term.
Powell’s comments earlier in the day reflected a cautious stance, warning that Trump’s tariffs were larger than expected and could fuel higher prices, potentially complicating the Fed’s efforts to control inflation.
"While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent," Powell said.
While markets had been hoping for an imminent rate cut, Powell did not indicate a timeline, emphasizing that policymakers needed more clarity before making any adjustments.
"We are well-positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy," he said.
Trump’s pressure on the Fed comes as election-year economic narratives take center stage, with the president touting strong job growth and falling prices as justification for looser monetary policy.
The Fed, however, has maintained that it remains independent of political influence, focusing instead on economic data and inflation trends.
With markets already on edge following Powell’s speech, Trump’s comments add another layer of uncertainty to the ongoing debate over interest rates, trade policy, and the central bank’s response to shifting economic conditions.
The stock market took another pounding Friday after China retaliated with new tariffs on U.S. goods, sparking fears President Donald Trump has ignited a global trade war that will lead to a recession.
The Dow Jones Industrial Average tumbled more than 1,700 points, or 4.5%, extending Thursday’s 1,679-point decline as markets reeled from escalating trade tensions.
The S&P 500 slid 4.9%, deepening Thursday’s 4.84% drop, and is now down more than 16% from its recent high, edging closer to bear market territory.
The Nasdaq Composite, heavily weighted with tech companies exposed to China, fell 5%. If the losses hold, the index will be 22% below its December record close, officially entering a bear market by Wall Street’s definition.
Tech giants Tesla (TSLA), Nvidia (NVDA), and Apple (AAPL), led the downturn. Tesla’s stock dipped by more than 10%, while Nvidia’s stock was down nearly 8% followed by Apple’s shares dropping 6.1% in afternoon trade on Friday.
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Read also: Trump Says China ‘Played It Wrong, They Panicked’ As Tariff War Fears Escalate
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